Rs 11 to Rs 129: This defence stock turned into a multibagger in two years; fell 11% from record high

Shares of Avantel Ltd have delivered nearly 1,000% returns in the last two years. The defence stock, which closed at Rs 11.48 on November 29, 2021 surged to a high of Rs 129 in the current session, clocking over 1,000% returns during the period. In comparison, Sensex has surged 17% during the period. The stock has gained 328% in a year and zoomed 383.35% this year. The telecom equipment stock opened higher at Rs 129 against the previous close of Rs 127.65 on BSE. Later , the stock slipped 3.56% to Rs 123.10. Market cap of the firm slipped to Rs 2,994.65 crore on BSE. Avantel shares have a beta of 0.3, indicating low volatility in a year.  

Avantel shares hit a 52-week low of Rs 21.98 on December 23, 2022 and a record high of Rs 136 on November 28, 2023. The stock has fallen 11% from its record high till date. 

In terms of technicals, the relative strength index (RSI) of the Avantel stock stands at 75.8, signaling it's trading in the overbought zone. Avantel shares are trading higher than the 5 day, 20 day, 50 day, 100 day, 150 day and 200 day averages. Avantel stock zoomed 1518% in three years and delivered 673% returns in two years.   

ALSO READ: YES Bank stock rises 24% in a month; is it a value pick or momentum trap?

Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher said, "The stock has witnessed a decent rally with series of higher lows formation on the daily chart with strong uptrend maintained and currently with Rs 135 zone acting as the resistance barrier, one can expect some profit booking with short correction having near term support of Rs 117-119 levels where it can consolidate. Further on the upside, a decisive breach above Rs 135 would confirm a breakout and with strength sustaining can anticipate for further higher targets of Rs 152-155 zone in the coming days." 

Abhijeet from Tips2trades said, "Avantel is bullish but also overbought on the Daily charts with next resistance at Rs 138.35. Investors should be booking profits at current levels as a Daily close below support of Rs 122 could lead to a target of Rs 103 in the near term." 

The stock traded ex-bonus from November 24 this year. Its board had cleared a bonus issue of shares in the ratio of 2:1. The board also cleared an increase in authorised share capital of the company.

ALSO READ: Multibagger defence stock rises for third straight session; what lies ahead?

Avantel reported a 142% rise in net profit to Rs 16.7 crore in Q2 against Rs 6.9 crore in second quarter of the previous fiscal.  Revenue zoomed 50.41%  to Rs 54.6 crore in the September 2023 quarter against Rs 36.3 crore  in the September quarter of the previous fiscal.   

EBITDA surged 138% to Rs 25.5 crore in the last quarter against Rs 10.7 crore in the September 2022 quarter.   

Avantel is engaged in the manufacturing of wireless front-end, satellite communication, embedded systems, signal processing, network management and software development and rendering related customer support services.  

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.  

Also read: Hot stocks on November 30: Reliance Industries, Timken India, IREDA, Adani Total Gas and more